The Government’s confusing new leasehold reform plans could take years to become law, according to one property expert.
Far from benefitting millions of leaseholders who had expected the law to be changed almost overnight, Cavendish Legal Group’s Jonathan Frankel, head of its specialist leasehold enfranchisement division, says they’ve been given false hope by the leasehold reform promises as many barriers still remain.
Housing Secretary Robert Jenrick announced this week that up to 4.5 million leaseholders would be given the right to extend their lease by up to 990 years at zero ground rent.
This means they won’t have to pay any ground rent to the freeholder, which could save them tens of thousands of pounds. A cap will be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder, while Jenrick also announced that a new online calculator would make it simpler for leaseholders to find out how much it will cost to buy their freehold or extend their lease.
However, Frankel says that one of the biggest hurdles for new owners remains, as new leaseholders will still have to wait two years before they can start the process of obtaining their statutory lease extension. “This is one of the key elements of the much-needed reforms,” he says.
“So, far from benefitting the many leaseholders who have been waiting for these reforms, it has only served to create confusion.”
Frankel is calling for more detail and a timetable for implementation of the leasehold reform plans. He adds: “The clock is ticking as the pressing point remains – the shorter the lease gets; the more costly it will be to extend.”
Under current rules, leaseholders of flats can extend their lease at a zero ‘peppercorn’ ground rent, but usually only for 90 years.